Disposition of data center portfolio represents the next step in the Tampa REIT’s plan for “liquidity event” for shareholders.
Sila Realty Trust Inc. late last month completed the sale of its 29-property data center portfolio to a Singapore-based firm, a move that allowed the Tampa-based real estate investment trust to pay down debt and reward its shareholders.
Tampa-based Sila Realty, the former Carter Validus Mission Critical REIT II, used the $1.32 billion deal’s net proceeds to retire $854 million in debt, and the company’s board approved a special distribution of $1.75 per common share with the balance.
Perhaps most importantly, the data center sale to Mapletree Industrial Trust will give Sila Realty the ability to pitch itself to Wall Street and institutional investors as a “pure-play” health care property owner.
That, in turn, should boost the company’s chances of entering into a “liquidity event” — likely a sale or a merger — between November 2022 and that same month in 2024, which is a stated goal.
Michael A. Seton, Sila Realty’s president and CEO, says the company remains confident it will “be able to meet that timeline.”
With the sale, Sila Realty now owns 124 health care properties containing 5.2 million square feet, which the company acquired for $2.2 billion.
Today, those properties are 96.2% leased and generate annual base rents of $149 million, according to an investor presentation video on Sila Realty’s website.
Along the Gulf Coast, Sila Realty currently owns health care properties in Tampa, Lakewood Ranch, Fort Myers, Bonita Springs and Lehigh Acres, according to its website.
Seton says with the data center sale, Sila Realty can better focus on its core mission.
“The majority of our portfolio is in health care, and given the demographic trajectory in the U.S., with the 65-and-over cohort gaining dramatically, we believe there’s a greater opportunity there going forward,” he says. “And we happened to make a significant gain on the sale, a stellar return.
“This further puts us on a greater path for the future,” Seton adds. “It should be very clear what we’re doing going forward.”